“So far our examination has revealed that the forces targeted an area located some 500 meters from the actual point of impact,” Galant said, adding that the malfunction may have been in the adjustment or targeting devices.

“It was estimated during the morning hours that Palestinians will attempt to fire Qassams from this area toward Ashkelon or some other area,” he said. “When you fire artillery shells toward this area there is a good chance that you are preventing an attack.”

Many children wre killed in strike (Photo: Reuters)

Defense Minister Amir Peretz convened a security establishment meeting during which he instructed Chief of Staff Dan Halutz to submit a report on the incident by Thursday evening. He also ordered the immediate opening of the Rafah crossing in Gaza.

International community responds

Following the fatal strike, the White House called on Israel to act with restraint in Gaza and expressed hope that Israel would quickly complete investigations into the incident.

Gordon Johndroe, spokesman for the White House National Security Council, called for restraint by all parties, adding: "We deeply regret the injuries and loss of life in Gaza today. We have seen the Israeli government's apology and hope their investigation will be completed quickly."

“We call on all sides to show restraint and avoid harming civilians,” he said.

The British response was rather more severe. Foreign Secretary Margaret Beckett British Foreign Secretary Margaret Beckett said she was deeply disturbed by the deaths of Palestinian civilians.

"Israel must respect its obligation to avoid harming civilians. It is hard to see what this action was meant to achieve and how it can be justified," Beckett said.

French Foreign Minister Philippe Douste-Blazy said France "condemns the indiscriminate artillery fire inside inhabited areas which occurred in violation of international humanitarian law and notably the Geneva Conventions".

France and Britain also criticised the continuing rocket attacks by Palestinian cells into Israel.